Optimism is an Ethereum optimistic rollup, which means it batches transactions off-chain and then publishes the batches on-chain periodically. Optimistic rollup

Optimism is an Ethereum optimistic rollup, which means it batches transactions off-chain and then publishes the batches on-chain periodically. Optimistic rollups are said to be 'optimistic' because the assumption is that all the transactions follow the rules and there's a 7-14 day challenge period where anyone can submit a fraud proof and challenge the history of the chain. If fraud is determined to have occurred, then the sequencer who batched the transactions is penalized and the fraud verifier is rewarded. The benefits are two-fold: 1) The off-chain transactions are cheaper because the gas fee is split among many participants instead of one 2) Users of the rollup can exit the rollup back to Ethereum at anytime ensuring full custody of their funds, even if the rollup was malicious or if the rollup halted. Optimism has open-sourced their optimistic rollup stack which allows anyone to fork Optimism and create their own rollup. This is what Coinbase has done. So Coinbase will now have a rollup of their own where they will be responsible for the sequencer (batching transactions) and anyone can deploy EVM compatible applications, like all of the other Layer 2 rollups currently in production. So Uniswap for example may deploy to Base, which will allow Coinbase users to easily use cheap defi.